'Financial constraints'

Speaking on BBC Radio Ulster's Talkback programme, a UKIP councillor said the motion was a "totally un-budgeted" proposal.

Henry Reilly said the cost to light up the arches for the Pride event was not viable when the council faced "such financial constraints".

Ms Kimmins hit back at criticisms over the expense - claiming it was an "equality issue".

"I believe that the councillors are hiding behind a camouflage in this issue around costs," she said.

"This is an equality issue because we all know the council has made exceptions in the past and last night there was a severe homophobic tone throughout that debate from a number of our councillors."

Ms Kimmins argued the funding was not a "waste of ratepayers money".

"The members of the LGBT are also ratepayers and they're entitled to reap the benefits of the rates as well," she said.

The Sinn Féin councillor also accused the SDLP of seeming to have "schizophrenic tendencies" when it came to making decisions over LGBT rights.

'Supportive'

SDLP councillor Michael Carr said the party was neither "schizophrenic" nor "homophobic".

"The SDLP is fully supportive of Newry Pride and gay rights. Last night's decision is in no way reflective of our steadfast support for the LGBT community," he said.

The Newry Rainbow Community said it was appalled at the decision.

In a statement, the organisation said, "Those councillors who voted against the proposal cannot hide behind considerations of cost, as the proposal would have installed the infrastructure that could have been used to mark, and support, a range of events throughout the year, including St Patrick's Day and the 12th July.

"It is clear that this knee-jerk reaction was triggered by the mention of rainbow colours and support for the LGBT organisation and is therefore deeply rooted in homophobia.

"Newry & Mourne District Council now has serious questions hanging over its commitment to the promotion of good relations."

A spokesperson for Newry and Mourne District Council told the BBC the decision was not homophobic, but was based on budget and cost.

He said the council's good relations policy at Mourne District Council was underpinned by Section 75 statutory duty to "promote good relations between persons of different religious belief, political opinion or racial group."